UPDATE 1-EU court rules in favour of bloc's trade deal with Canada

Published Tue, Apr 30 2019 4:33 AM EDT

Philip Blenkinsop

(Adds background of dispute over CETA in Belgium)

BRUSSELS, April 30 (Reuters) - The EU-Canada free-trade agreement's provisions to protect investors do not breach EU law, the European Court of Justice (ECJ) ruled on Tuesday in a major relief for proponents of the deal that came into force in 2017.

The ECJ's judges said that the mechanism to resolve disputes between investors and states in the Comprehensive Economic and Trade Agreement (CETA) with Canada, which critics say unfairly favour multinationals, is in line with EU law.

The system of tribunals to settle disputes between foreign investors and states became a focal point of protests against the planned EU-U.S. TTIP trade deal and CETA when EU countries were deciding whether to back the latter in 2016.

The Belgian region of Wallonia, then led by the Socialists, threatened to block the deal, but the federal government persuaded it not to do so in return for certain concessions - including a request for the ECJ to give its view.

Belgian Foreign Minister Didier Reynders, whose liberal MR party will be battling to stay in power in an election in May, said he was pleased with the ruling, adding in a statement that Belgian businesses had done well in the first year of CETA.

The agreement entered force on a provisional basis in September 2017. Full implementation of CETA, including the investor protection parts, requires approval by all 28 EU member countries and, for Belgium, also of its regional parliaments. (Reporting by Philip Blenkinsop; Editing by Robin Emmott and Alison Williams)